The owners of SoundCloud, one of the world’s largest music streaming services, are preparing for a sale that could fetch in excess of $1bn.

Sky News has learnt that Raine Group and Temasek Holdings, the Singaporean state investment fund, have begun interviewing investment banks about a prospective auction of the company.

Founded in 2007, SoundCloud provides artists with the tools to build their careers by providing them with an online home to publish their work.

In total, more than 40 million artists have released 320 million tracks on the platform.

A sale of SoundCloud would underline the scale of its turnaround in recent years, with its progress having accelerated under Eliah Seton, who took over as chief executive last year.

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When Raine and Temasek invested in 2017, the business was reportedly on the brink of collapse.

It had struggled to monetise its business model in an era of rapidly shifting economics in the global music industry.

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The major record labels, including Universal and Warner Music, remain key players, although a number of independents and start-ups using different ways to connect artists and consumers have also found ways to make money.

Last year, SoundCloud laid off just under 10% of its workforce as it targeted annual profitability for the first time.

The process of selling SoundCloud is unlikely to get underway for some months, according to one insider.

A Soundcloud spokeswoman declined to comment.

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